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Clarity
1901 Howard Street, Suite 300, Omaha, NE 68102
http://www.claritydevco.com/
Neeraj Agarwal
Principal
nagarwal@claritydevco.com
+1 (402) 981-3735
No
Please see the uploaded organizational chart for the 2501 Center project.
The principals of Clarity have developed and have in progress approximately $500 million of commercial, residential, and mixed-use real estate projects, including new construction and historic renovations with a primary focus on utilizing tax credits to develop affordable housing. They bring depth and experience from inception to completion and stabilization of the project. Clarity has wide ranging experience with Low Income Housing Tax Credits (LIHTC), Tax Increment Financing (TIF), Historic Tax Credits (HTC) and New Market Tax Credits (NMTC). The principals of Clarity have completed multiple 4% LIHTC projects and are consequently well versed in the 4% LIHTC and tax-exempt bond financing application and approval processes. New construction affordable housing/Low Income Housing Tax Credit (LIHTC) projects include Blair High Residences aka Aspen Grove (192 units), Sorensen Apartments aka Prairie Springs (120 units), Hillside Rows (32 units) and 30 Metropolitan Place (112 units). All of these projects have been successfully been completed and are at or above 93%+ occupancy as of today. New construction market rate projects include Blackstone Corner, Blackstone Depot, and Blackstone Station and Union. Historic projects include the Colonial Apartments, which contributed to the tremendous revitalization of the Blackstone District, and Drummond & Firestone, which is part of the increasing activity on Omaha’s historic Automobile Row in Midtown Omaha.
2501 Center: transforming dilapidated office buildings into affordable 3-bedroom and 4-bedroom row houses
36382308.0
6000000.0
Capital project
LOCATION This transformative project will be located on two adjacent sites located at approximately 2501 Center Street, Omaha, NE 68105. The primary site consists of 2501 Center Street, which currently consists of approximately 3 acres and has two dilapidated and vacant buildings on it- one of these buildings is high-rise office building that once served as the Salvation Army offices. TIMELINE The project will start construction by September 2023 and will be completed by June 2025. OVERVIEW 2501 Center (“project” or “Project”) will serve as the one of the largest ever new construction affordable housing projects in the Midtown Omaha area. The project will consist of 77 row houses that will comprised of (A) 59 3-bedroom units and (B) 18 4-bedroom units. All units will have attached 2-car garages on the rear portion of the each unit. There will also be onsite amenities such as, among other things, (a) a community room where onsite supportive services can be provided (b) a fully equipped fitness center. NOTE: As one of the few minority developers in the state, Neeraj Agarwal is focused on ensuring that (1) at least 10% of the subcontractors for the project are either (a) minority or women-owned businesses and (2) most, if not all, of the commercial tenants are minority or women-owned businesses. The Project is a result of Clarity’s continued dedication to building high quality affordable housing in Omaha combined with its goal of developing such affordable housing in Omaha’s urban core. For too long, affordable housing in Omaha has been essentially limited predominantly to North Omaha. While there is, of course, a need for affordable housing in this area, there has always been a strong need for more affordable housing in Midtown and Downtown Omaha that has grown substantially in the last ten years given that most developers have focused exclusively on producing more market rate apartments in these areas and this has resulted in the vast majority of individuals between 18-40 years old who work in Downtown and Midtown being unable to afford the increasingly high rent of market rate apartments. 2501 Center will be an answer to this problem and will serve as the first of multiple affordable housing projects Clarity is planning to develop in Midtown and Downtown Omaha as part of its larger effort to address the strong demand for affordable housing in Omaha’s urban core.
The project will start construction by September 2023 and will be completed by June 2025.
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Fundamental Change (i.e., a proposal that will continue to elevate North or South Omaha's presence and perception within the region, significantly improving the lives of area residents through physical development) Transformational (i.e., a proposal that will help energize, recharge, or spur significant and favorable advancements in North or South Omaha's function or appearance)
Other Infrastructure (i.e., develop or improve broadband, business districts, roadways, sewer, etc.) Sustainable Community (i.e., create or enhance housing, services, education, civic uses, recreation, etc.)
The proposed project, 2501 Center, will specifically address the identified community needs below: SUSTAINABLE COMMUNITY 2501 Center will address this specific community need as it will result in the creation of 77 newly constructed, high-quality affordable housing row houses with 3 and 4-bedrooms that will be ideal for families. These row houses will be essentially identical relative to the exteriors of two market row house projects the developer, Neeraj Agarwal, is developing in Omaha: (a) Juniper Rows at Deer Creek (120th and Military Road and (b) Juniper Rows at Olde Towne (204th and Main Street in Elkhorn). There is an undeniable need for more affordable housing in Omaha. This has been increasingly more necessary in recent years due to the seemingly ceaseless production of market rate housing that, along with recent inflation, is elevating rents to the point that two-bedroom units are frequently on average over $1,500/month in various parts of Omaha. 2501 Center will help address this need for affordable housing through the addition of 77 affordable/LIHTC row houses that will range from three- to four-bedroom units in the heart of Midtown Omaha with rents starting at approximately $850/month. The project site is located in a qualified census tract (QCT), specifically tract 33.00. One major objective of the 2501 Center project is to combat the stigma often associated with affordable housing in two specific manners: (1) by elevating the aesthetic and quality of affordable housing apartments to a higher level such that they are aesthetically and qualitatively indistinguishable from market rate apartments and (2) by ensuring that projects like this one are as safe and secure as possible by incorporating numerous security features such as security cameras and daily and nightly security patrols into the project. OTHER INFRASTRUCTURE 2501 Center will address this specific community need as it will result in the creation of outdoor communal spaces/playgrounds.
2501 Center aligns with the findings in the Visioning Workshop Summary in the following ways: INUSFFICIENT INFRASTRUCTURE + DEVELOPMENT THAT FITS WITHIN THE CULTURAL CONTEXT: Through the creation of 77 affordable housing row houses, 2501 Center addresses the finding that there is a need for newer and more affordable housing. ACCESS AND TOOLS TO LEVERAGE COMMUNITY RESOURCES: 2501 Center addresses this finding is it is exemplary of the tremendous positive impact leveraging community resources can have relative to directly addressing and helping address the substantial issues like the lack of high quality and safe affordable housing in the Omaha MSA. Specifically, 2501 Center leverages numerous community resources such as (1) Tax Increment Financing (TIF) (2) Property Assessed Clean Energy (PACE) and (3) Low Income House Tax Credits (LIHTCs).
The proposal aligns with LB1024’s strategic priorities because the project’s creation of 77 high quality and newly constructed affordable row houses in a Qualified Census Tract will result in a fundamental change to a neglected area of Midtown Omaha that will ultimately improve the lives of area residents.
There will be approximately twenty (20) temporary construction jobs created as a result of 2501 Center. The wages for these jobs are anticipated to range between $50,000-$70,000. There will be approximately three (3) permanent jobs created as a result of 2501 Center and specifically related to the leasing and management of the property. The wages for these jobs are anticipated to range between $40,000-$60,000.
There will be approximately three (3) permanent jobs created as a result of 2501 Center.
There will be approximately twenty (20) temporary construction jobs created as a result of 2501 Center.
The wages for the permanent and temporary jobs are anticipated to range between $40,000-$70,000.
2501 Center will result in immediate and ongoing opportunity to contractors in QCTs given its focus on ensuring that at least 10% of the subcontractors on the project are minority and women-owned businesses that are located in QCTs in the Omaha MSA.
The project will benefit the community by providing newly constructed, high quality 3-bedroom and 4-bedroom row houses that will specifically satisfy a need for affordable housing that is suitable for families. HIGH QUALITY AFFORDABLE HOUSING: The project will improve the local neighborhood by transforming the primary site of 2501 Center which currently consists of two vacant and dilapidated buildings that will be demolished and an adjacent site into will 77 3-bedroom and 4-bedroom row houses with attached row houses with rents that start at $850/month. The project will be unique because of the intentional. The project is unique because the developer, Neeraj Agarwal, has made a commitment to utilizing higher-end materials on both the exterior and interior of the building that are often found in luxury market rate projects in the Blackstone District and throughout Downtown Omaha. This commitment is part of greater effort to counteract the stigma often associated with affordable housing projects looking cheap or as if they were constructed from lower quality materials (e.g. primarily vinyl siding). Due to this voluntary election to utilize higher quality materials, the project construction cost is substantial (i.e. in excess of $220,000 per unit) and in line with what a market rate project would cost to develop.
The project will contribute to community sustainability through the addition of newly constructed, high quality affordable housing. The addition of desperately needed affordable housing to the Midtown area is key because it allows lower-to-moderate income individuals who work in this area and adjacent areas the opportunity and ability to reside nearby where they work. Currently, this is not feasible given the seemingly constant production of luxury market rate apartments with high rents and the lack of newly constructed and high-quality affordable housing in the area.
The project will demonstrate innovation primarily through the use of higher-end exterior and interior materials for the development of affordable housing that are often only used in luxury market rate projects.
The project will result in the creation of a number of permanent and temporary high-wage job opportunities.
This can be measured by the relevant City and County agencies obtaining data regarding the number of and wages associated with the permanent and temporary jobs the project will create through their respective subagencies and departments.
Yes. The project will serve as catalyst for more development in the Midtown/South Omaha area because the successful completion of this $36MM+ project will provide real estate developers that have held off on developing property to the south of the project site due to the lack of any activity a compelling reason to finally develop newly constructed projects in the area.
Yes
The following is a list of current and prospective partnerships and how these partners have or will participate: 1. TRUE PURPOSE: True Purpose is a current partner that is a 501(c)(3) founded and led by an African-American couple, Tashiara and Tyrece Wilson. True Purpose will be supportive service partner that will help provide supportive services relating to employment and life skills and will also coordinate with other supportive service partners that focus on education, health and wellness. 2. MODUS COWORKING: Modus Coworking is a current partner and is a high-end coworking space that is located nearby at1901 Howard Street. Modus will offer discounted coworking memberships to tenants at the project so that tenants have convenient, affordable and fully-equipped coworking space they can utilize in this new hybrid world when they want to change things up from working at home or need professional meeting space for meetings, workshops, etc.
True Purpose
No
(1) 2501 Center Street, Omaha, NE 68104 and a nearby parcel without an address and (2) an adjacent site across the street that consists of (a) 1710 S. 25th Avenue (b) 1706 S. 25th Avenue and (c) an adjacent small parcel without an address.
Within one or more QCTs
Please refer to the uploaded documentation.
No
No
No
No
No
Based on the construction costs utilized for two projects that are identical relative to the exterior design that are finishing construction: (1) Juniper Rows at Deer Creek: $20MM construction contract for 92 units at 120th and Military in Northwest Omaha where construction will be completed in November 2022 (2) Juniper Rows at Olde Towne: $22MM construction contract for 101 units at 204th and Main Streets in Elkhorn where construction will be completed in February 2023. Developer will be engaging the same architect (Architectural Offices aka AO) and Lueder that it utilized for the two above projects and has accounted for inflation in its construction budget for the 2501 Center project.
Yes
No
Developer selected Lueder to construct the project because Lueder has the expertise and experience to develop the row house projects given it is completing construction on the two abovementioned developments that are essentially identical to the proposed 2501 Center project.
The rationale for the dollar amount requested is that the amount requested the gap financing required for the project to be financially feasible. Specifically, there is a substantial gap in the project primarily for the following reasons: (1) 4% LIHTC PROJECTS REQUIRE GAP FINANCING: 4% LIHTC projects like 2501 Center always requiring gap financing of some kind. This is because the 4% LIHTC is a relative shallow subsidy compared to its 9% LIHTC counterpart and this results in a need for gap financing to make a 4% LIHTC project financially feasible. This is particularly so when (a) high interest rates result in lower loan proceeds and (b) inflation results in higher construction costs. (2) HIGHER INTEREST RATES RESULTING IN LOWER LOAN PROCEEDS: interest rates having increased substantially over the last 18 months, which has resulted in the project losing over $1MM in loan proceeds. (3) INFLATION RESULTING IN HIGHER MATERIAL AND LABOR COSTS: inflation resulted in increased material and labor costs which has increased construction costs by millions of dollars.
Grant funds will specifically be utilized as gap financing mechanism needed to actually construct the proposed affordable housing project.
Yes
The project will function normally after the initial investment, specifically: (1) Construction: the grant funds will be utilized to partially fund the construction of the project. (2) Construction completion and path to economic stabilization: After the project is constructed, the 3rd party property manager, Seldin, will coordinate with the developer to lease up the residential row houses. After the residential row houses are fully leased up such that project is able to pay its permanent loan monthly debt service at a debt service coverage ratio (DSCR) of 1.15 and above for 3 consecutive months, the project will have satisfied the economic stabilization requirements set forth by the LIHTC investor and permanent lender. (3) After satisfying the economic stabilization requirements: After satisfying the economic stabilization requirements, developer and the property manager will coordinate weekly to ensure the project is remains financially successfully and specifically remains above 90% occupancy at all times and is able to service permanent debt without any issues
LIHTC: applying for an allocation in December 2022 and anticipate an award by February 2023. PNC Bank is anticipated to be the LIHTC investor and has provided a financial commitment. TIF/PACE: Developer will apply for TIF and PACE financing in February 2023 after obtaining a LIHTC allocation and is targeting August 2023 to obtain all related necessary approvals. Developer will not monetize TIF and will monetize the PACE. Developer has a financial commitment from Pace Loan Group. Permanent/Construction loans: The project has received a financial commitment from a national private lender, Redstone. Developer and owner financing: The project has received financial commitments from the developer and ownership.
LIHTC: The developer will submit a LIHTC application in December 2022 and anticipates a decision from the Nebraska Investment Financing Authority (NIFA) by February 2023. TIF/PACE: Developer will apply for TIF and PACE financing in February 2023 after obtaining a LIHTC allocation and is targeting August 2023 to obtain all related necessary approvals. Developer will not monetize TIF and will monetize the PACE. Developer has a financial commitment from Pace Loan Group.
Yes, the requested gap financing funds.
While the project can be replicated and arguably be developed on a large scale, it cannot be completed in smaller components.
The organization will be invested approximately $2,850,000.00 via its developer and owner affiliates through a combination of (1) $1,000,000 of owner contributions and (2) $1,850,000 long term investment of development fees.
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Additional Location Documents (see application for list) Documentation of site control (proof of ownership, option, purchase contract, or long-term lease agreement) Environmental assessment of subject site. Is the property a brownfield site? Organizational Chart Plans and detailed descriptions, including pictures and a map of the site location/surrounding area Pro Forma Proposal Budget/Sources and Uses